From India Ratings & ResearchIDFC First Bank announced that India Ratings & Research ('Ind-Ra') has assigned 'IND AA+/ Negative' Rating/ Outlook in respect of Bank's 'Basel III - Tier 2 Bonds' of Rs. 2000 crore (Size of Issue) and have affirmed existing ratings (IND AA+/ Negative) in respect of Bank's other senior debt instruments (Infra Bonds & NCDs).
The Negative Outlook reflects Ind-Ra's expectation that IDFCFB's profitability will remain subdued in the medium term, on account of higher-than-envisaged operating expense, thereby reducing buffers to absorb volatility in credit cost and incremental provision required on stressed book. The bank's build-up of retail CASA and retail deposit franchise, the diversification of the retail asset franchise away from wholesale assets, and the ability to remain profitable after factoring in provision on stressed assets would be key monitorables for the rating agency.
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